Redbox traded their entire float again, this time by 12.5x

This article was originally published on Monday, May 2nd, 2022 @ 4:20p EST and was last edited on Tuesday, May 3rd, 2022 @ 9:45p EST.

Introduction to this experiment: On March 8th, 2022 u/thelostcow began publishing a new series of ‘Daily Duckery’ posts over on r/SuperStonk chronicling all tickers that had more trades in a single day than their entire float.

I’ve also created this spreadsheet which aggregates the data from all ‘Daily Duckery’ posts into a single spreadsheet.

^ Note: The tickers highlighted in green (column “C”) represent those that appear more than once. Meaning, the highlighted tickers have traded over their float multiple times since the data-logging began.

To quote u/thelostcow, “While it could be the same shares trading back and forth multiples of times, it’s more likely a signal that the ticker has counterfeit shares present in the market.”

My hypothesis for this experiment aligns with this quote and I’ve been running this experiment to try and prove it.

I’ve also got a couple of side-quests that I’m actively tracking and trying to answer;

  • Is it possible to identify over-float trading activity during market hours?
  • If so, is it possible to make money from these patterns?
  • If so, is it possible to make more money than the DJIA, S&P 500 or NASDAQ on a daily basis?
To start answering these questions, let’s take a closer look at the daily market activity for Redbox which first popped up in the over-float trading data on March 18th, 2022.
$RDBX has traded more than their entire float seven times in eight weeks

The table above shows that over the last 8 weeks, $RDBX has traded over their float seven different times.

 $RDBX’s greatest over-float volume (so far) occurred on Monday, May 2nd, 2022 when their entire float traded more than 12.5 times (12.64).

Taking a closer look at $RDBX’s daily chart from April 29th one thing really stood out to me was in the “Why is it moving” section?

The screenshots below are from TD Ameritrades iOS app and you can see the following quote from Bill Haddad, “Redbox Entertainment shares are trading higher. Not seeing company-specific news from the session.”

Above: Screenshot of $RDBX chart from April 29, 2022 @ 2:21p EST
Above: No company-specific news to help explain price movement.

My version of Bill’s non-answer to “why is it moving” would be something more along the lines of;

 “Today Redbox Entertainment traded more than 8x their float and no one knows why.”

Let’s move forward to the very next trading day (Monday, May 2nd, 2022) where $RDBX had already traded 5.31x their float by 10:55a EST.

Above: Screenshot of $RDBX chart from May 2, 2022 @ 1:43p EST
Above: Again, no company-specific news to explain price movement.

This time we see another non-explanation but this time it’s from Denny Jacob, “There was no apparent news or releases from the company on Monday.”

Trading was halted for the third time on Monday approximately 6-minutes after the chart screenshot displayed above.

With that said, the question remains… Why has there been so much trading activity over the past two trading sessions for Redbox Entertainment?

Above: $RDBX traded their entire float 12.5x by 4:00p EST on 5/2/22.
Above: Again, no company-specific news to explain price movement.

Is there some logical explanation or is this perhaps something more nefarious happening in the market?

To be clear, I don’t have an answer (outside of a “trust-me-bro” gut-reaction) to either of those questions yet but I do plan to continue running this experiment and will provide additional updates in the coming days/weeks.

Lastly, I’d like to revisit (and answer) the three side-quest questions posed at the beginning of this article. 

Is it possible to identify over-float trading activity during market hours?

Yes, I have confirmed that the ‘Daily Duckery’ scrape can be run during regular market hours to identify over-float trading activity in real-time.

On April 29th, I scraped the data @ 12:37p EST and $RDBX had already traded their entire float more than 3.5 times (3.54x).

On May 2nd, I scraped the data @ 10:55a EST and $RDBX has already traded their entire float more than 5.3 times (5.31x).

If so, is it possible to make money from these patterns?

So far the answer is yes, but with a huge asterisk next to that yes* for now.

To be fully transparent, I have only tested this theory on $RDBX for two trading sessions (April 29th & May 2nd).

On April 29th, I bought $RDBX @ $4.62 and sold @ $5.92 for an intraday gain of +28.24%,

On May 2nd, I bought $RDBX @ $7.34 and sold @ $8.59 for an intraday gain of +17.03%.

If so, is it possible to make more money than the DJIA, S&P 500 or NASDAQ on a daily basis?

Again, so far the answer is yes, but with another huge asterisk next to that yes* as well.

On April 29th, the bar wasn’t set too high since the DJIA closed -2.8%, S&P 500 closed -3.6% and NASDAQ closed -4.2%.

On May 2nd, all three indexes ended green with the DJIA closing +0.25%, S&P 500 closing +0.56% and NASDAQ closing +1.63%.

Disclaimers: 

I am not suggesting anyone buy any of the tickers identified within this post. This is purely for informational purposes with the goal of providing broader insight into the market.

Following this round-trip strategy daily with a trading account balance < $25,000 will get you flagged as a pattern day trader awfully quickly (in four days). You can learn more about the pattern day trader rules here.

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